Odebrecht to Float Jumbo Platform

Brazil’s Odebrecht is preparing to launch a hefty project loan to finance the construction and operation of two twin Petrobras drillships. The $1.6bn project will count on some $300m in equity from the sponsor and $1.3bn in debt to be sourced from commercial and ECA lenders, say people close to the process. The commercial portion will be worth from $780m to over $900m, depending on how much ECA debt Odebrecht can raise. Santander, SocGen, RBS and BNP Paribas are leading the commercial portion, which will likely have a 10-year tenor door-to-door, with the first 2 years accounting for the construction period. Odebrecht is heard seeking margins starting at 250bp-300bp over Libor, and stepping up to 375bp-400bp in the final year, say people involved. Loan market bankers away from the deal say that is an ambitious range, and that at the very least, Odebrecht would have to start at 300bp, if not higher. By contrast, Chile’s AES Gener is out with a $445m 10-year loan for its Campiche coal-fired project that starts at 350bp in year 1. Campiche is both smaller and located in a higher-rated country, and also offers juicy fees of 300bp for $50m MLA tickets. That may force Odebrecht to consider pricing well outside its comfort zone, say bankers. Like many highly rated LatAm borrowers, Odebrecht has apparently expressed dismay at the new rates, which lenders say are based on interbank funding at 200bp over Libor, in some cases. Odebrecht is also heard targeting a 12-year ECA portion, and has received interest from Korea’s Kexim and Norway’s GIEK. The transaction is likely to be launched to a club of banks in March, say executives involved. Retail syndication could follow.